The probability of the hotel industry entering into recession in the near-term, which is detected in real-time from HIL with the help of sophisticated statistical techniques, registered 48.5% in May, up from 43.2% reported in April.
DURHAM, NEW HAMPSHIRE USA – Future business activity in U.S. hotels declined in May according to the latest reading of the hotels' future business conditions (HIL) indicator. e-forecasting.com's HIL, a composite indicator that gauges future monthly overall business conditions in the U.S. hotel industry, fell by 0.1% in May to 127.1, following a decline of 0.1% in April. The index is set to equal 100 in 2010.
Looking at HIL's six-month growth rate, which has historically confirmed the forthcoming turning points in U.S. hotel business activity, posted a positive rate of 0.1% in May, following a positive rate of 0.4% in April. This compares to a long-term annual growth rate of 2%, the same as the 30-year average annual growth rate of the industry's gross domestic product.
The probability of the hotel industry entering into recession in the near-term, which is detected in real-time from HIL with the help of sophisticated statistical techniques, registered 48.5% in May, up from 43.2% reported in April. When this recession-warning gauge passes the threshold probability of 50% for a more than three months, the U.S. hotel industry will enter a recession phase in its business cycle.
"HIL, the best predictive analytic of what's next for US hoteliers failed to grow for a sixth month in a row," said Maria Sogard, CEO at eforecasting.com. "In May, the risk for a recession in the hotel industry approached 50%," Maria added.
Five of the forward looking indicators of business activity that comprise Hotel Industry Leading (HIL) Indicator had a positive contribution to its change in May: Jobs Market; Hotel Profitability; Foreign Demand; Yield Curve; New Orders and Vacation Barometer. Four indicators of future business activity had a negative or zero contribution to HIL's change in May: Hotel Worker Hours; Oil Prices and Housing Activity.
"The six month growth rate of HIL, a long-term growth predictive analytic which confirms the underlying cyclical behavior in the growth of US hotel business, has consistently slowed down in the last fourteen months hitting an annual growth rate of 0.1% in May from a high of 5.9% in February of 2015," said Evangelos Simos, professor of economics at the University of New Hampshire and advisor for predictive analytics at e-forecasting .com. "When long-term growth in HIL enters a negative terittory, the US hotel industry enters the recession land," he added.
The latest HIL reading is used to update e-forecasting.com’s total US Monthly Hotel Forecast as well as market level forecasts for the top 25 US markets. The firm also covers EMEA markets via a partnership with HotStats with hotel market profitability forecasts.
Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales.
She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.
